Ford Motor Company is a U.S multinational car producer located in the city of Dearborn, Michigan, a suburb of Detroit. The company was founded by Henry Ford and on June 16, 1903 it was incorporated. Along with the Ford and Lincoln brands, Ford also owns a small part of Mazda in Japan and Aston Martin in the UK. UK subsidiaries of FORD ,Jaguar and Land Rover were sold to Tata Motors in India on March 2008. Ford sold Volvo to Geely Automobile.Ford in 2010 exposed the Mercury brand by 2010.
Ford Motor is the second-largest car manufacturer in the United States and fifth largest in the world in terms of the number of annual shipments. By the end of 2010 it was the largest producer of Europe. Ford is the eighth in the order of U.S. companies in the Fortune 500 list for 2010 on the basis of total revenues in 2009 U.S. dollars 118.3 billion. In 2008, produces by Ford Motor Company 5.532 million and employs approximately 213,000 employees in 90 plants and facilities in all parts of the world. During the crisis of the automotives, there was a drop in the production of Ford, overall 4817000, in 2009. In 2010, Ford had a net profit of 6.6 billion U.S. dollars, reducing its debt by 33.6 billion dollars to 14.5 billion U.S. dollars. The company received more quality survey awards form JD Power and Associates for the automotive industry more than any other. Ford took five cars in four categories and a dozen cars in the top three.
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The company being located in USA has to follow the regulatory frame work of Us, i.e US GAAP.United States generally accepted accounting principles, and usually abbreviated as the U.S. QAAP. Or principles of accounting, simply accounting standards used to show and in the preparation and submission of reports of financial statements for a variety of facilities, including publicly traded companies and private non-profit organizations and governments. And usually contains generally accepted accounting principles applicable under local accounting standards.
Honda Motor Co., Ltd. is a Japanese multinational car producer. In the first place it was known as a manufacturer of cars and motorcycles.
Measured by Honda it is the world's largest manufacturer of motorcycles, and since 1959 the world's largest manufacturer of internal combustion engines, and has the production volume of more than 14 million engines each year. Honda Overtook NISSAN in April 2001, and became the second largest Japanese automobile industry. In August 2008, Honda surpassed Chrysler for the automotive industry and became the fourth largest in the United States. Honda is the largest automobile manufacturer and ranks in the sixth place in the world.
It was Honda's automobile industry which launched a luxury barnd for the first time in Japanese which was Acura in 1986. Apart from the basic car and motorcycle company, Honda also garden equipment, marine engines and personal watercraft, generators and others. Since 1986, Honda has contributed to artificial intelligence and robotics research robot ASIMO to him in 2000. They dared to enter the aviation industry with the establishment of Aero Engines GE Honda in 2004 and her Honda HondaJet - 420, scheduled for launch in 2011. Honda spends about 5% of its revenues in research and development.
Honda being located in Japan has to prepare its financial statements in accordance with IFRS.
International Financial Reporting Standards (IFRS) are the criteria on the principles, interpretations, and social programs set by the International Accounting Standards.
Many of the rules that are known are part of the international standards by the former name of the International Accounting Standards). IAS 1973-2001 by the Council of the International Accounting Standards Committee (Standing Committee) International. On April 1, 2001, adopted a new computerized National Identity Card Inter-Agency Standing Committee responsible for the development of international accounting standards. At its first meeting of the new Council, and international accounting standards and the current SIC. International Accounting Standards Board in the development of new standards by calling the new standards criteria.
Background and problem definition:
The research problem to be addressed would be: "The differences and similarities arising in the financial statements of Honda and Ford car Manufacturers due to different regulatory frameworks".
The researcher will try to answer the following questions:
Always on Time
Marked to Standard
What are the differences and similarities in the financial statements of the two car manufactures?
What are the two regulatory bodies? their standards and reporting procedures?
What is the role of audit and accounting professions?
The objectives of this research are as follows:
Find the differences and commonalities of the way key assets, liabilities, capital and earnings are recognized and disclosed in the financial statements.
1. financial accounting
2. financial reporting
3. accounting standards
4. legislations relevant to accounting
regulation and enforcement of the regulatory framework by the regulatory bodies.
Role of audit and accounting professions in this aspect
Literature Review / Theory
Standard is the "principles" to regulate the development of general rules, as well as dictating specific treatments to consider.
International Financial Reporting Standards include the follows:
International Financial Reporting Standards , and standards published after 2001
International Accounting Standards (IAS), and regulations issued before 2001
Interpretations have been issued in the International Financial Reporting Interpretations Committee (interpretation) after 2001
Committee has issued interpretations of (sic), before --2,001
Framework for the preparation and presentation of financial statements (1989)
The objective of financial statements
You must balance the true image of the organization's activities. Since these data are used by various components of society / regulatory authorities take into account to some extent the financial situation of the Organization.
Qualitative characteristics of financial statements
Qualitative characteristics of financial statements as follows:
True and fair view / fair presentation
Elements of financial statements
Company's financial situation is basically the State for financial assistance.
Assets: An asset is a resource of the company, following the events of the past, to control the flow of future economic benefits for the company.
Liability: A liability is a present obligation of the company from past events whose settlement is expected to lead to the flow of corporate resources ",
Equity: is the company's remaining assets after deduction of all obligations under the historical cost method. It is also well known as the owner's shares.
The financial performance of the company is primarily in the profit and loss account or balance sheet provided. Elements of profit and loss account or the elements, and measurement of financial performance are:
Income: the economic benefits increased during the period in the form of inflows or enhancements of assets or decrease in liabilities to an increase in equity. But input from the participants in the securities markets, two of the owners, partners and shareholders.
Cost: to increase the benefits of economic decline during the period in the form of outflows or depletion of assets or liabilities, resulting in a reduction of equity.
U.S. generally accepted accounting principles (GAAP)
United States generally accepted accounting principles, and usually abbreviated as the U.S. GAAP. Or principles of accounting, simply accounting standards used in the preparation and submission of reports and the financial statements for a variety of facilities, including publicly traded companies and private non-profit organizations and governments. And usually contains generally accepted accounting principles applicable under local accounting standards, and the law on the rules and accounting standards.
Currently, the Financial Accounting Standards Board (FASB), which is the highest authority in determining the principles of proper accounting of public companies, private and non-profit organizations. To state and local governments, and generally accepted accounting principles expected by the Governmental Accounting Standards Board of the Council (GaSb), which operates under a number of principles and assumptions and constraints, determined by different standards of accounting principles generally accepted private sector. Accounting in the Federal Government is treated by the Advisory Board of the Federal Accounting Standards FASAB).
Provisions of U.S. generally accepted accounting principles differ somewhat from the international standards for the preparation of financial reports.
There is an important difference between U.S. generally accepted accounting principles and standards is to allow three different concepts essential to capital and capital maintenance according to international accounting standards as approved by U.S. generally accepted accounting principles only two concepts of capital and capital maintenance of the low-inflation and deflation: Maintain on physical capital and capital maintenance financial nominal monetary units (the traditional historical cost accounting).
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Generally accepted accounting principles of America does not recognize the concept of capital a third party, and the preservation of capital, low inflation and deflation, and maintenance of any of the authorized capital in units of purchasing power continued as Under international standards in the British Royal Air Force in 1989.
The most important areas of similarities and differences between Us GAAP and IFRS should be on the financial statements of companies in the European Union, with international standards as adopted by the European Commission. These rules may vary in some cases, international standards by the International Accounting Standards Board
Other differences in terms of accounting practices,policies and financial statements are as follows:
Relevant standards of IFRS
Form and content of by IFRS selected, including the International Accounting Standards still exists, SIC / interpretation
Interpretations. Specified may be additional requirements under local law, authorities or stock exchanges.
Relevant standards OF GAAP
The form and content that by GAAP specified in the hierarchy of generally accepted accounting principles.
Financial statements in accordance with International Financial Reporting Standards include:
â€¢ Balance sheet
â€¢ Income statement
â€¢ Statement of the following:
1. - Changes in equity or
2. - Changes in equity other than those arising from capital transactions with owners anddistributions owner of Rome
â€¢ Income and Expenditure
â€¢ cash flow
â€¢ accounting policies and notes
â€¢ the financial statements of assets and liabilities, financial position and results of the company. Requires a fairly accurate representation of what the effects of transactions and events and other conditions in accordance with the definitions and criteria for recognition of assets and liabilities, income and expenditure , concepts and general principles.
â€¢ the application of this standard for small and medium businesses, additional information if necessary, and the findings contained in the financial statements present fairly the financial position and performance for small and medium businesses.
â€¢ the application of international standards, an entity with public accountability does not lead to equitable representation of the International Financial Reporting Standards.
Financial statements under GAAP comprise of:
â€¢ Total national income. This statementmay with profit and loss account or in combination
Statement of Changes in Equity
â€¢ Statement of changes in equity.
â€¢ cash flow
â€¢ Notes to the financial statements
In the context of assets, standards and commitments, income and expenses not offset, as permitted or required by a standard or interpretation, while the profits of generally accepted accounting principles will
â€¢ Each of the Parties other amounts can be determined
â€¢ There is a right for compensation
â€¢ The right to compensation is legally
IFRS two main expense categorizations:
Nature of expenses
Function of expenses
IAS 1 does not specify the form of flour, but not fixed, the elements that should appear on the face of the income
Additional information and should be on the face of the profit and loss account and notes
U.S. GAAP does not provide a standard format, single or multiple stages is acceptable. Supreme Education Council
Sox organization requires that a specific property shown on the face of profit and loss
Time horizon for the continuation of the work is a "reasonable period of time not exceeding one year from the date of closure." (Issued Financial Accounting Standards Board on the proposal, however, the horizon of international standards.)
Within the framework of international standards, a company has a complete set of financial statements at least once a year. When the changes in recent times for the period from the unit and the annual financial statements in more or less, the company that was established to provide the following information:
1. This fact.
2. The reason for the use of longer or shorter.
3. Provided that the comparative figures are not in the financial statements (including the notes) the results are quite similar.
Contrary to international standards, generally accepted accounting principles, changes in this report, the reference period not exceeding twelve months. In these cases, the company shall be to prepare financial statements for the period of transition, and the beginning of a new phase of the date of notification.
Consistency of presentation is same under both regulatory:
The company has maintained the presentation and classification of items in its financial statements from period to period, unless:
Clearly, after a significant change in the nature of the project or revise their financial statements, that another presentation or classification would be more appropriate taking into account the criteria for selecting and applying accounting policies in Article 10 of the accounting estimates and errors, or
Standard requires a change in the presentation. Itself.
When the view or modify the classification of items in the financial statements, the Company has classified comparative figures if not in practice. Comparative figures have been classified, a company must provide the following information:
1. The nature of the reclassification.
2. The quantity of each item or group of elements that have been reclassified.
3. Reason for reclassification.
Complete set of financial statements include the following criteria:
â€¢ The balance sheet at the time of writing this report.
One ad of the total income in the reporting period that all revenues and expenses during this period, including objects in determining the profit or loss (which is partly a result of the statement of comprehensive income) and other items of income or
Separate profit and loss account and a separate statement of comprehensive income. If the company decides all of the profits and losses for the submission of comprehensive income, statement of comprehensive income or loss starts, then displays the conditions on the overall result.
â€¢ Statement of changes in equity for the year.
â€¢ Status of cash flows for the period.
â€¢ information which contains a summary of significant accounting policies and other explanatory notes
Can be contrary to international standards for small and medium enterprises, the overall result of the statement of changes in property rights to be represented.
Is not required in a separate statement of the rights of shareholders, and can display the difference of capital in the notes to the financial statements.
Under IFRS the statement of financial position shall include the following amounts:
Cash and cash equivalents.
Receivables and other assets.
Property, plant and equipment.
Real estate investments at fair value recognized in earnings.
Biological assets are stated at cost less accumulated depreciation and depreciation.
Diversity in the acquired assets at fair value.
Investments in associates.
Investments in entities subject to joint control.
Supplies and services.
Tax assets and liabilities.
Deferred tax liabilities and deferred tax assets (which are always long term).
Provided non-controlling interests in shares separately from the property rights of the owners of the parents.
Equity holders of the parent.
Registered with the SEC informal, there is little data on the balance sheet.
In contrast to the IFRS for small and medium enterprises, and deferred tax assets and liabilities are classified as items of current or long-term for the classification of assets or liabilities that led to the temporary difference.
A review of the assets, equity and other details of:
Revenue US$128.954 billion (2010)
Operating income US$7.149 billion (2010)
Net income US$6.561 billion (2010)
Total assets US$165.693 billion (2010)
Total equity US$-642 million (2010)
Employees 164,000 (2010)
Revenue US$120.27 billion (FY 2009)
Operating income US$2.34 billion (FY 2009)
Net income US$1.39 billion (FY 2009)
Total assets US$124.98 billion (FY 2009)
Total equity US$40.6 billion (FY 2009)